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Activity Review
North Carolina State
Board of Certified Public
Accountant Examiners
1101 Oberlin Road, Suite 104, PO Box 12827, Raleigh, NC 27605 ( 919) 733- 4222 Issue No. 7- 2002
Inside this issue...
Board Directory ..................................... 7
Board Meetings ..................................... 5
Certificates Issued ................................. 5
Correction: Statement No. 39 ............ 3
Declaratory Ruling ................................ 3
Disciplinary Actions .............................. 2
Exam Grades .......................................... 4
NCDOR Issues Directives .................... 4
Notice of Address Change .................. 8
Reclassifications: Retired ..................... 5
Reclassifications: Inactive .................... 6
Please note the following applica-tion
deadlines for the November 2002
Uniform CPA Examination:
Initial exam applicants
July 31, 2002
Re- exam applicants
August 30, 2002
Your complete application must
be postmarked or received in the
Board office before the appropriate
deadline.
The examination fee is $ 250.00,
regardless of the number of sections
for which you are sitting. Your can-celed
check or credit card statement
is proof only that your application
was received— it does not indicate
that your application has been ap-proved.
To obtain an exam application,
please call the Board’s application
line ( 1- 800- 211- 7930) or visit the
Board’s web site ( www. state. nc. us/
cpabd).
Exam Applications
On June 20, 2002, the Securities and
Exchange Commission ( SEC) voted
unanimously to propose rules to reform
oversight and improve accountability of
auditors of public companies, thereby
enhancing the reliability and integrity of
the financial reporting process.
The proposed rules establish the
framework for a Public Accountability
Board ( PAB)— a system of “ private sec-tor”
( but not “ self”) regulation that would
not be under the control of the account-ing
profession.
The structure is intended to supple-ment
the SEC’s oversight and enforce-ment
efforts by expanding the opportu-nities
to detect and remedy ethical lapses
or deficiencies in competence, thereby
complementing the SEC’s enforcement
efforts.
“ Investor confidence is the bedrock
of our markets, ” said SEC Chairman
Harvey L. Pitt.
“ Ineffective oversight of public com-pany
audits damages that confidence.
Our proposal will help restore investor
faith by ensuring strong and effective
regulation of the accounting profession.”
“ In putting forth this proposal, we
begin a process that ensures real change
before year’s end,” explained Pitt.
The proposed rules are based on
extensive public input, including com-ments
received during a series of SEC-sponsored
Roundtables and the SEC’s
first Investor Summit. The rule will be
open to comment for 60 days after pub-lication
in the Federal Register.
Key provisions of the proposed rules
include:
Membership - To assure that the
benefits of the new regulatory regime
extend to investors in all public compa-nies,
the financial statements of SEC-registered
companies would not be
deemed to comply with SEC require-ments
unless the company’s outside
auditors were members of a PAB.
To ensure that a PAB has access to
diverse, non- discretionary, funding and
full information about audits, an SEC-registered
company’s financial state-ments
also would not comply with SEC
requirements unless the company was
an adjunct member of, and thereby bound
to cooperate in any review or proceeding
commenced by, the same PAB as its ac-countants.
SEC Oversight - The SEC would
recognize a PAB after reviewing, and
being satisfied with, among other things,
the entity’s proposed structure, charter,
by- laws, rules, stated practices, proposed
budget, proposed board members, mem-bership
requirements, systems, and pro-cedures.
The SEC would also oversee selec-tion
or termination of PAB board mem-bers,
and the authority to review, alter,
modify or abrogate any PAB rule or dis-ciplinary
sanction.
SEC Formally Proposes Framework of a
Public Accountability Board
Public Accountability Board
continued on page 4
whether or not the Board accepts this
Order as written.
BASED UPON THE FOREGOING, the
Board makes the following Conclusions
of Law:
1. Respondent is subject to the provi-sions
of Chapter 93 of the North Caro-lina
General Statutes ( NCGS) and
Title 21, Chapter 8 of the North Carolina
Administrative Code ( NCAC), includ-ing
the Rules of Professional Ethics and
Conduct promulgated and adopted
therein by the Board.
2. Respondent’s actions as set out above
constitute violations of NCGS 93- 12( 9) e
and 21 NCAC 8N .0203( b)( 3).
BASED ON THE FOREGOING and in
lieu of further proceedings under
21 NCAC Chapter 8C, the Board and
Respondent agree to the following Or-der:
1. The effective term of the suspension
of Respondent’s CPA certificate is ex-tended
by at least one ( 1) year and until
Respondent provides the Board with
verification of his completion of eight ( 8)
hours of CPE in accounting and audit-ing.
2
Disciplinary Actions
Melvin Brent James
Raleigh, NC 06/ 24/ 02
THIS CAUSE, coming before the Board
at its offices at 1101 Oberlin Road, Ra-leigh,
Wake County, North Carolina,
with a quorum present. Pursuant to
NCGS 150B- 41 and 150B- 22, the Board
and Respondent stipulate the follow-ing
Findings:
1. Respondent was the holder of North
Carolina certificate number 11002 as a
Certified Public Accountant.
2. On March 16, 2001, the North Caro-lina
State Board of CPA Examiners
( Board) approved a Consent Order ( Or-der)
signed by Respondent which sus-pended
Respondent’s certificate for at
least one ( 1) year and obligated Respon-dent
to complete several other require-ments.
3. Respondent failed to timely comply
with several of the requirements as
mandated by the March 16, 2001, Order.
4. In October of 2001, Respondent deliv-ered
to the Board evidence of his efforts
to comply with the requirements as
mandated by the March 16, 2001, Order
with the exception of his failure to com-plete
eight ( 8) hours of continuing pro-fessional
education ( CPE) in account-ing
and auditing.
5. At its October 2001 meeting, the Board
approved the issuance of a Letter of
Warning to Respondent regarding his
failure to timely comply with the re-quirements
of the March 16, 2001, Or-der.
6. In this letter, the Board agreed to
extend until December 31, 2001, the re-quirement
that Respondent complete
eight ( 8) hours of CPE in accounting and
auditing.
7. As of the date of this Order, Respon-dent
has failed to provide the Board
with verification of his completion of
eight ( 8) hours of CPE in accounting and
auditing.
8. Respondent wishes to resolve this
matter by consent and agrees that the
Board staff and counsel may discuss
this Order with the Board ex parte,
Theodore Ezzell Peterson, Jr.
Charlotte, NC 06/ 24/ 02
THIS CAUSE, coming before the Board
at its offices at 1101 Oberlin Road, Ra-leigh,
Wake County, North Carolina,
with a quorum present. Pursuant to
NCGS 150B- 41 and 150B- 22, the Board
and Respondent stipulate the follow-ing
Findings:
1. Respondent was the holder of North
Carolina certificate number 3979 as a
Certified Public Accountant.
2. On August 21, 2000, the North Caro-lina
State Board of CPA Examiners
( Board) approved a Consent Order
signed by Respondent that required
Respondent to obtain and complete peer
reviews which should have been ob-tained
and completed for 1994 and 1997
compliance with the Board’s State Qual-ity
Review requirements. This Order also
required that Respondent obtain pre-issuance
reviews of all audits, reviews,
and compilations which Respondent
worked on or performed until such time
as Respondent’s employer received an
unqualified opinion on a peer review
that included audits, reviews, and com-pilations
worked on or performed by
Respondent and until Respondent com-pleted
the 1994 and 1997 peer reviews.
3. It now appears that Respondent
would be unable to complete his 1994
AICPA peer review due to his inability
to complete AICPA’s requirements for
its acceptance of the peer review.
4. Further, it appears that it would be
difficult, if not impossible, for Respon-dent
to obtain and complete a peer re-view
of information that should have
been reviewed in a timely 1997 peer
review.
5. In September of 2001, Respondent’s
employer received an unqualified opin-ion
on a peer review that included a
compilation and a review that Respon-dent
prepared. However, the peer re-view
did not include any audits which
Respondent worked on or prepared.
6. Respondent’s employer is continu-ing
to obtain pre- issuance reviews of
audits worked on or prepared by Re-spondent.
7. Respondent wishes to resolve this
matter by consent and agrees that the
Board staff and counsel may discuss
this Order with the Board ex parte,
whether or not the Board accepts this
Order as written.
BASED UPON THE FOREGOING, the
Board makes the following Conclusions
of Law:
1. Respondent is subject to the provi-sions
of Chapter 93 of the North Caro-lina
General Statutes ( NCGS) and
Title 21, Chapter 8 of the North Carolina
Administrative Code ( NCAC), includ-ing
the Rules of Professional Ethics and
Conduct promulgated and adopted
therein by the Board.
2. Respondent’s actions along with the
other facts and conditions as set out
RE: 21 NCAC 8N .0402
BACKGROUND INFORMATION
Petitioner is licensed in North Caro-lina
and Petitioner’s firm is registered
to do business in North Carolina as a
limited liability partnership.
Petitioner’s firm is offering a service
for third- party administration of de-fined
contribution retirement plans
only. The third- party administration
services provided would be as follows:
1. Preparation of summary statements
of participant financial information;
2. Preparation of participant account
statements;
3. Preparation of IRS Form 5500;
4. Performance of nondiscrimination
tests as required for the plan;
5. Computation of forfeiture and dis-tribution
amounts;
6. Determination of vesting percent-ages
for employees;
7. Calculation and allocation of em-ployer
contributions; and
Declaratory Ruling
Declaratory Rulings set no precedents and are limited to the facts of the request and may be relied upon only by the requesting party.
3
above indicate that Respondent has
made some reasonable efforts to comply
with the prior Consent Order, but that
unless that Order is supplemented, the
objectives of that Order might be
unachievable under the circumstances.
BASED ON THE FOREGOING and in
lieu of further proceedings under
21 NCAC Chapter 8C, the Board and
Respondent agree to the following Or-der:
1. Respondent is hereby released from
the August 21, 2000, Consent Order re-quirement
that he obtain and complete
the 1994 and 1997 peer reviews.
2. Respondent must continue to obtain
pre- issuance review of any audit that he
works on or performs until he or his
employer receives an unqualified peer
review report that includes audits that
Respondent worked on or performed.
8. Allocation of gains and losses to
individual participant accounts.
QUESTIONS
1. Can Petitioner’s firm perform an au-dit
for a client for which the firm is
providing third- party administration
services?
2. Can Petitioner’s firm perform an au-dit
or review for a client who is the
sponsor of a separate retirement plan
for which the firm is providing third-party
administration services?
CONCLUSION
No, to both questions. Petitioner’s firm
would not be independent in either in-stance
pursuant to the AICPA Code of
Professional Conduct, Section 101- 3 and
to the Board’s ethics rule, 21 NCAC 8N
.0402( c)( 1) because Petitioner’s firm
would be preparing source or original
documents of the following nature:
1. Statements of participant financial
information;
2. IRS Form 5500;
3. Computation of forfeiture and dis-tribution
amounts;
4. Determination of vesting percent-ages;
and
5. Calculation of employer contribu-tions.
Petitioner would also not be indepen-dent
in providing an audit or review to
a client who sponsors a defined ben-efit
retirement plan for which
Petitioner’s firm also performs audits
that plan and provide third- party ad-ministration
services.
Date of Request: 04/ 29/ 02
Date of Board Approval: 06/ 24/ 02
If you have questions regarding this
Declaratory Ruling, please contact
Robert N. Brooks, Executive Director
of the NC State Board of CPA Examin-ers,
by telephone at ( 919) 733- 4222 or
via e- mail ( rnbrooks@ bellsouth. net).
During the final stages of production of
GASB Statement No. 39, an error oc-curred
and the phrase “ or its compo-nent
units” was inadvertently dropped
from paragraph 5 of the Standard.
The missing phrase is in criterion
40a( 2) and is shown below in boldface
type.
5. Paragraph 40a is added between
paragraphs 40 and 41 as follows:
40a. Certain organizations warrant in-clusion
as part of the financial reporting
entity because of the nature and significance
of their relationship with the primary gov-ernment,
including their ongoing financial
support of the primary government or its
other component units. A legally separate,
tax- exempt organization should be reported
as a component unit of a reporting entity if
all of the following criteria are met:
1. The economic resources received or
held by the separate organization are en-tirely
or almost entirely for the direct benefit
of the primary government, its component
units, or its constituents.
2. The primary government, or its
component units, is entitled to, or has the
ability to otherwise access, a a majority of the
economic resources received or held by the
separate organization.
3. The economic resources received or
held by an individual organization that the
specific primary government, or its compo-nent
units, is entitled to, or has the ability to
otherwise access, are significant to that pri-mary
government.
a [ The footnote is correct as printed.]
To obtain a “ peel- and- stick” cor-rection
overlay, please call GASB at
1- 800- 748- 0659 or send an e- mail to
( gasbpubs@ gasb. org).
Error Correction for GASB Statement No. 39
www. state. nc. us/ cpabd
4
Independent PAB Board - To en-sure
independence from the accounting
profession, a PAB would be dominated
by persons not associated with the ac-counting
profession.
This requirement likely would be
met by a board with nine members - no
fewer than six of whom are indepen-dent
public members, and no more than
three of whom are practicing or retired
members of the public accounting pro-fession.
The latter members would provide
needed current expertise, but possible
accounting profession members would
expressly not have any vote in, or say
about, a PAB’s determinations regard-ing
disciplinary actions or findings
about, and sanctions to be imposed on,
members.
Independent PAB Funding - A PAB
will have a dependable, uninterrupted,
non- discretionary funding source, from
both its accounting firm members and
public company adjunct members, to
ensure that its funding is not based on
discretionary payments or on funding
exclusively by the accounting profes-sion.
Strong Oversight by PAB - Ac-counting
firms, individual accountants,
public companies and their manage-ment
would be required and obligated
to cooperate with PAB quality control
reviews and disciplinary proceedings,
and a PAB would determine appropri-ate
document retention guidelines for
its member firms.
Failure to cooperate could result in
suspension of the right to conduct pub-lic
audits. A PAB’s efforts would be
directed at enforcing ethical and com-petency
standards respecting account-ing
firms and individual accountants.
A PAB would not conduct any roving
investigations of public companies.
PAB Quality Control Reviews - A
PAB will directly perform quality con-trol
reviews of audit procedures and
practices, at least annually for large firms
( those that audit approximately 80% of
SEC- registered US public companies)
and at least triennially for all other firms.
Such reviews will be designed to
ensure that audit firms have quality
control policies and procedures regard-ing,
among other things: ( i) indepen-dence,
integrity and objectivity of au-dits;
( ii) personnel management; ( iii)
acceptance and continuation of audit
clients; ( iv) audit performance; ( v) audit
methodology; and ( vi) consultation and
resolution of differences of professional
opinion during audits.
In addition to the above items, qual-ity
control reviews would address,
among other things: ( i) rotation of audit
personnel; ( ii) independent partner re-views
of audits; ( iii) consulting services;
( iv) reporting termination of auditor
engagements to the SEC; ( v) assisting in
audits by foreign associated firms; ( vi)
reporting litigation alleging violations
of the securities laws; and ( vii) partners
and employees of auditors joining cli-ents.
PAB Disciplinary Powers - A PAB
will be responsible for conducting pub-lic
disciplinary proceedings and im-posing
a broad range of disciplinary
sanctions against its accounting firm
and individual accountant members,
including fines, censures, removal from
client engagements, limitations on ac-tivities
and suspension from auditing
either specific SEC clients, or all SEC
clients for a time certain, or an unlimited
time.
A PAB may discipline individual
accountants for unethical or incompe-tent
conduct or other violations of pro-fessional
standards. A PAB may disci-pline
accounting firms for not having
quality control systems that meet the
highest professional standards or for
not complying with such systems in a
way that provides reasonable assur-ance
that the firm meets or exceeds pro-fessional
standards in its audit, review
or attest engagements.
Audit Standard Setting - A PAB
will have the responsibility for assur-ing
high ethics, auditing, and quality
control standards, either by setting them
directly or by relying on and overseeing
designated private sector bodies as au-thoritative
sources of such standards.
( A PAB will not, however, establish
GAAP, which would continue to be
established by the FASB, subject to revi-talized
and revamped SEC oversight).
For more information about the pro-posal,
visit the SEC web site
( www. sec. gov).
NCDOR Issues Three
Directives
The Corporate Income, Excise, and In-surance
Tax Division of the NC Depart-ment
of Revenue ( NCDOR) recently is-sued
three directives on corporate in-come
and franchise tax.
Directive CD- 02- 1, Nexus and Filing
Obligations of Corporate Members of Lim-ited
Liability Companies ( LLCs), clarifies
the NCDOR’s position concerning
nexus and filing obligations of corpo-rate
members of limited liability compa-nies
( LLCs).
Directive CD- 02- 2, Corporate Mem-bers
of Limited Liability Companies , ex-plains
the North Carolina franchise tax
liability of a corporate member of a lim-ited
liability company ( LLC) under
NCGS 105- 114, as amended by Chapter
327 of the 2001 Session Laws.
Directive CD 02- 3, Internal Revenue
Code § 338( h)( 10), announces a change
in the NCDOR’s administrative prac-tice
as it relates to North Carolina’s
recognition and treatment of the gains
or losses that result from a taxpayer’s
election to treat a stock sale as a deemed
sale of assets under Internal Revenue
Code § 338( h)( 10). The change is effec-tive
for acquisition dates occurring on
or after June 1, 2002.
The full text of the directives is avail-able
from the NCDOR web site
( www. dor. state. nc. us). Additional in-formation
about the directives can be
obtained by calling the Corporate, Ex-cise,
and Insurance Tax Division of the
NCDOR at ( 919) 733- 8510.
Grade reports for the May 2002
Uniform CPA Examination will be
mailed to candidates August 5, 2002.
A candidate whose address has
changed since sitting for the exam
should submit a change of address
form to the Board as soon as possible.
Address changes must be in writ-ing
and may be faxed to the Exam
section at ( 919) 733- 4209.
Address changes may also be e-mailed
to jmacombe@ bellsouth. net
or pwelliot@ bellsouth. net.
Exam Grades
Public Accountability Board
continued from front page
5
The Financial Accounting Standards
Board ( FASB) has approved for issu-ance
an Exposure Draft of a proposed
Interpretation that establishes account-ing
guidance for consolidation of spe-cial-
purpose entities ( SPEs).
The proposed Interpretation, Con-solidation
of Certain Special- Purpose Enti-ties,
will apply to any business enter-prise—
both public and private compa-nies—
that has an ownership interest,
contractual relationship or other busi-ness
relationship with an SPE.
The proposed guidance would not
apply to not- for- profit organizations.
The comment period concludes August
30, 2002.
The objective of this proposed Inter-pretation
is to improve financial report-ing
by enterprises involved with SPEs—
not to restrict the use of SPEs.
However, it is expected that when
this proposal is implemented, more SPEs
will be consolidated than in the past.
Most SPEs serve valid business pur-poses,
for example, by isolating assets or
activities to protect the interests of credi-tors
or other investors, or to allocate
risks among participants.
Many SPEs that were unconsoli-dated
prior to the issuance of this pro-posed
Interpretation were reported ac-cording
to the guidance and accepted
practice that existed prior to this pro-posed
Interpretation.
Current accounting standards re-quire
an enterprise to include subsidiar-ies
in which it has a controlling finan-cial
interest in its consolidated financial
statements.
That requirement usually has been
applied to subsidiaries in which an
enterprise has a majority voting interest
but, in many circumstances, the
enterprise’s consolidated financial
statements do not include SPEs with
which it has fundamentally similar re-lationships.
The reason is that existing consoli-dation
guidance focuses primarily on
Reclassification - Retired
Retired
“ Retired,” when used to refer to the status of a person, describes one possessing
a North Carolina certificate of qualification who verifies to the Board that the
applicant does not receive or intend to receive in the future any earned
compensation for current personal services in any job whatsoever and will not
return to active status [ 21 NCAC 8A .0301( b)( 23)]
06/ 24/ 02 Augustus Thomas Allen, Jr. Raleigh, NC
06/ 24/ 02 Grady S. Duncan Belmont, NC
06/ 24/ 02 Charles S. Myerly Columbia, SC
06/ 24/ 02 Jane Parenteau Kernersville, NC
06/ 24/ 02 Lawrence P. Roesen Newport News, VA
06/ 24/ 02 Robert C. Wade Arden, NC
06/ 24/ 02 Kenneth Frederick Winton Kenansville, NC
FASB Proposes Consolidation Principles for SPEs
parent- subsidiary relationships estab-lished
through voting ownership inter-ests,
and the relationship between a
business enterprise and an SPE is estab-lished
through other means.
FASB believes that if a business
enterprise has a controlling financial
interest in an SPE, the assets, liabilities
and results of the activities of the SPE
should be included in consolidated fi-nancial
statements with those of the
business enterprise, which is referred to
as the primary beneficiary of the SPE.
As to finalization of this project, the
FASB expects to issue an Interpretation
in the fourth quarter of this year.
The accounting guidance would be
effective immediately upon issuance of
the Interpretation for new SPEs.
Companies with SPEs that existed
prior to issuance of the Interpretation
would be required to apply the guid-ance
to the existing SPEs at the begin-ning
of the first fiscal period after
March 15, 2003.
Calendar year- end companies
would need to apply the guidance on
April 1, 2003.
The Exposure Draft may be accessed
from the FASB’s web site at
( www. fasb. org) or by calling the FASB
Order Department at 1- 800- 748- 0659.
Board Meetings
Friday, August 16
Monday, September 23
Friday, October 18
Monday, November 18
Tuesday, December 17
Meetings of the Board are held at the
Board office and are open to the pub-lic.
However, under State law, some
portions of the meetings are closed to
the public.
If you wish to address the Board
regarding a specific issue, please con-tact
Robert N. Brooks, Executive Di-rector
of the Board, by telephone at
( 919) 733- 4222 at least two weeks
prior to the scheduled Board meet-ing.
Certificates Issued
At its June 24, 2002, meeting, the Board
approved the following applications
for certification:
Bryan G. Goetsch
Samuel Snowden Hayes
Robert Edward Stoettner
If you have comments about items pub-lished
in the Activity Review, please
contact Lisa R. Hearne, Communica-tions
Manager, by telephone at ( 919)
733- 4208 or by e- mail at
( lhearne@ bellsouth. net).
Comments
6
Reclassification - Inactive Status
Inactive
“ Inactive,” when used to refer to the status of a person, describes one who has requested inactive status and been approved
by the Board and who does not use the title “ certified public accountant” nor does he or she allow anyone to refer to him or
her as a “ certified public accountant” and neither he or she nor anyone else refers to him or her in any representation as
described in 21 NCAC 8A .0308( b) [ 21 NCAC 8A .0301( b)( 23)].
06/ 19/ 02
Murray Hearin Schmitt Rocky Mount, NC
Thresa Kay Pressley Raleigh, NC
John Robert Prekker Danville, NC
06/ 21/ 02
George Edward King, Jr. Cary, NC
Danielle Stephenson Lowden Raleigh, NC
Christopher Hubert Steinhardt Charlotte, NC
William H. Hockman Washington, PA
Susan Fulcher Nelson Collinsville, VA
06/ 24/ 02
Melvin A. Bost Concord, NC
Lana D. Imhof Waxhaw, NC
06/ 25/ 02
John Lewis Johnson Burlington, NC
Clarence Gordon Stillwell, Jr. Greensboro, NC
David Alan Pruett Roanoke, VA
Millicent Hawkins Williams Apex, NC
Harold Lee Flowers Ft. Lauderdale, FL
Steven Craig Highland Waynesboro, VA
Kristine Suong Dinh Augusta, GA
Cheryl Hilliard Habrat Charlotte, NC
Lynn Karen Hiller West Des Moines, IA
Daniel R. Lucas Plantation, FL
John Joseph Riedel, Jr. South Lake Tahoe, CA
Kelli Ann Koonsman Charlotte, NC
06/ 26/ 02
David Scott Hood Charlotte, NC
06/ 27/ 02
Joseph Asa Whitt Richmond, VA
James Hampden Howard, Jr. Gastonia, NC
James Howard Hatch Charlotte, NC
Lindon G. Robertson Bethel, CT
James Phillip Wilson Raleigh, NC
Holly Morgan Burdette Concord, NC
06/ 28/ 02
Thomas Hooper Averitt Aberdeen, NC
Robert Gerard Matkovich Gordonsville, VA
James Dean Whittaker Cary, NC
Rudell Richardson Macon, GA
Stephen Emile Tremblay Baltimore, MD
Cynthia Ann Best Durham, NC
Jason Bradley Whitlatch Greensboro, NC
Nancy Louise Davis Orlando, FL
06/ 11/ 02
Alfred Clyde Starling Charlotte, NC
James Barron Cartwright, Jr. Cemmons, NC
John Charles Wright Potomac, MD
William McGillvary Orr, III Ellicott City, MD
William Michael Kay Hickory, NC
Donald Roland Suttles Winston- Salem, NC
John Markelonis Germantown, MD
David James Bowman Kernersville, NC
Walter Greene Church, Jr. Valdese, NC
Sue Patterson Bielawski Chapel Hill, NC
Leah J. McKern San Francisco, CA
Sherri Snowden Voelkel Riva, MD
Henrietta Stewart Wheeler High Point, NC
Joy Elizabeth Dickerson Greenville, SC
Todd Ryan Rosenthal Charlotte, NC
Karen Lynn Miller Clearwater, FL
Angela Criminger Ellis Charlotte, NC
Elizabeth Ballentine Gierhart Hope Mills, NC
Elizabeth Ann Weeber Raleigh, NC
Billie Goodman Ausdenmoore Huntersville, NC
James A. Rippin Greensboro, NC
Gerald Earl Bartram Yucaipa, CA
06/ 12/ 02
Lisa Powell- Temple Holly Springs, NC
06/ 14/ 02
Ralph Edward Forrest Cary, NC
Dennis Niel Folken Sapphire, NC
Melissa Gardner Cowherd Southern Pines, NC
J. Eric Teeter Salisbury, NC
Laura Wilson Freeman Huntersville, NC
Ashley Champion Jones Gastonia, NC
Michael Heath Walters Charlotte, NC
Marty Leigh Clyburn Wilmington, NC
06/ 17/ 02
Sheldon Michael Fox Memphis, TN
Deborah Ritchie Fox Memphis, TN
Christopher Scott Wright Hartford, CT
Mattie Ashburn Simmons Tarboro, NC
Pamela Morgan Watson Atlanta, GA
Linda Susan Lompa Oconomowoc, WI
06/ 18/ 02
Teresa Bullard East High Point, NC
06/ 19/ 02
Robert Frank Key Greensboro, NC
Renee C. Allain- Stockton Switzerland
77
Main Telephone Number ( 919) 733- 4222
Fax Number ( 919) 733- 4209
Toll- Free Application Line 1- 800- 211- 7930 ( for requesting exam & licensing applications)
Mailing Address PO Box 12827 Raleigh, NC 27605- 2827
Physical Address 1101 Oberlin Road, Suite 104 Raleigh, NC 27605- 1169
Web Site http:// www. state. nc. us/ cpabd
Office Hours Mon. - Fri., 8 a. m. - 5 p. m. ( closed on State holidays)
Please use the following directory to correctly identify the person to contact to receive prompt service from the Board.
If the person you need to speak with is unavailable, you may leave a message on his or her voice mail or you may
press “ 0” to reach the receptionist.
Administrative Services ( accounting, purchasing, mailing labels & lists)
Felecia F. Ashe ( 919) 733- 4223 feleciaa@ bellsouth. net
Communications ( newsletter, web site, press releases)
Lisa R. Hearne, Manager ( 919) 733- 4208 lhearne@ bellsouth. net
Examinations ( exam applications, general exam information)
Judith E. Macomber, Manager ( 919) 733- 4224 jmacombe@ bellsouth. net
Phyllis W. Elliott ( 919) 733- 4224 pwelliot@ bellsouth. net
Executive Director ( Board meetings, public hearings, rule- making requests)
Robert N. Brooks ( 919) 733- 1425 rnbrooks@ bellsouth. net
Licensing ( general licensing information)
Buck Winslow, Manager ( 919) 733- 1421 buckwins@ bellsouth. net
Licensing ( CPA certificate applications & renewals)
Alice G. Steckenrider ( 919) 733- 1422 alicegst@ bellsouth. net
Licensing ( CPE, SQR, firm registrations & renewals)
Lynn Wyatt ( 919) 733- 1423 lynnwyat@ bellsouth. net
Professional Standards ( ethics complaints, declaratory rulings, disciplinary hearings)
Ann J. Hinkle, Manager ( 919) 733- 1426 ahhinkle@ bellsouth. net
Jo Gaskill ( 919) 715- 2455 jogaskil@ bellsouth. net
Receptionist
Karen Burton ( 919) 733- 4222 karenburton@ bellsouth. net
.
North Carolina State Board of CPA Examiners
Directory of Board Services
Please save this page for future reference.
Certificate No. Send Mail to Home Business
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Telephone: Bus. ( ) Home ( )
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Certificate Holder
Last name Jr./ III First Middle
North Carolina State Board of
Certified Public Accountant Examiners
Post Office Box 12827
Raleigh NC 27605- 2827
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Greensboro, NC
Permit No. 393
21,000 copies of this document were printed for this agency at a cost of $ 2,758.29 or 13¢ per copy in July 2002.
Certificate holders not notifying the Board in writing within 30 days of any change in address or business location may be subject to
disciplinary action under 21 NCAC 8J .0107.
Address Change? Let Us Know!
Signature Date
Mail to: NC State Board of Fax to: ( 919) 733- 4209
CPA Examiners
PO Box 12827
Raleigh, NC 27605- 2827
State Board of
CPA Examiners
Board Members
R. Stanley Vaughan, CPA
President, Charlotte
O. Charlie Chewning, Jr., CPA
Vice President, Raleigh
Michael H. Wray
Secretary- Treasurer, Gaston
Barton W. Baldwin, CPA
Member, Mount Olive
Scott L. Cox, CPCU, CIC
Member, Charlotte
Walter C. Davenport, CPA
Member, Raleigh
Leonard W. Jones, CPA
Member, Morehead City
Staff
Executive Director
Robert N. Brooks
Legal Counsel
Noel L. Allen, Esq.
Administrative Services
Felecia F. Ashe
Communications
Lisa R. Hearne, Manager
Examinations
Judith E. Macomber, Manager
Phyllis W. Elliott
Licensing
Buck Winslow, Manager
Alice G. Steckenrider
Lynn Wyatt
Professional Standards
Ann J. Hinkle, Manager
Jo Gaskill
Receptionist
Karen Burton

Activity Review
North Carolina State
Board of Certified Public
Accountant Examiners
1101 Oberlin Road, Suite 104, PO Box 12827, Raleigh, NC 27605 ( 919) 733- 4222 Issue No. 7- 2002
Inside this issue...
Board Directory ..................................... 7
Board Meetings ..................................... 5
Certificates Issued ................................. 5
Correction: Statement No. 39 ............ 3
Declaratory Ruling ................................ 3
Disciplinary Actions .............................. 2
Exam Grades .......................................... 4
NCDOR Issues Directives .................... 4
Notice of Address Change .................. 8
Reclassifications: Retired ..................... 5
Reclassifications: Inactive .................... 6
Please note the following applica-tion
deadlines for the November 2002
Uniform CPA Examination:
Initial exam applicants
July 31, 2002
Re- exam applicants
August 30, 2002
Your complete application must
be postmarked or received in the
Board office before the appropriate
deadline.
The examination fee is $ 250.00,
regardless of the number of sections
for which you are sitting. Your can-celed
check or credit card statement
is proof only that your application
was received— it does not indicate
that your application has been ap-proved.
To obtain an exam application,
please call the Board’s application
line ( 1- 800- 211- 7930) or visit the
Board’s web site ( www. state. nc. us/
cpabd).
Exam Applications
On June 20, 2002, the Securities and
Exchange Commission ( SEC) voted
unanimously to propose rules to reform
oversight and improve accountability of
auditors of public companies, thereby
enhancing the reliability and integrity of
the financial reporting process.
The proposed rules establish the
framework for a Public Accountability
Board ( PAB)— a system of “ private sec-tor”
( but not “ self”) regulation that would
not be under the control of the account-ing
profession.
The structure is intended to supple-ment
the SEC’s oversight and enforce-ment
efforts by expanding the opportu-nities
to detect and remedy ethical lapses
or deficiencies in competence, thereby
complementing the SEC’s enforcement
efforts.
“ Investor confidence is the bedrock
of our markets, ” said SEC Chairman
Harvey L. Pitt.
“ Ineffective oversight of public com-pany
audits damages that confidence.
Our proposal will help restore investor
faith by ensuring strong and effective
regulation of the accounting profession.”
“ In putting forth this proposal, we
begin a process that ensures real change
before year’s end,” explained Pitt.
The proposed rules are based on
extensive public input, including com-ments
received during a series of SEC-sponsored
Roundtables and the SEC’s
first Investor Summit. The rule will be
open to comment for 60 days after pub-lication
in the Federal Register.
Key provisions of the proposed rules
include:
Membership - To assure that the
benefits of the new regulatory regime
extend to investors in all public compa-nies,
the financial statements of SEC-registered
companies would not be
deemed to comply with SEC require-ments
unless the company’s outside
auditors were members of a PAB.
To ensure that a PAB has access to
diverse, non- discretionary, funding and
full information about audits, an SEC-registered
company’s financial state-ments
also would not comply with SEC
requirements unless the company was
an adjunct member of, and thereby bound
to cooperate in any review or proceeding
commenced by, the same PAB as its ac-countants.
SEC Oversight - The SEC would
recognize a PAB after reviewing, and
being satisfied with, among other things,
the entity’s proposed structure, charter,
by- laws, rules, stated practices, proposed
budget, proposed board members, mem-bership
requirements, systems, and pro-cedures.
The SEC would also oversee selec-tion
or termination of PAB board mem-bers,
and the authority to review, alter,
modify or abrogate any PAB rule or dis-ciplinary
sanction.
SEC Formally Proposes Framework of a
Public Accountability Board
Public Accountability Board
continued on page 4
whether or not the Board accepts this
Order as written.
BASED UPON THE FOREGOING, the
Board makes the following Conclusions
of Law:
1. Respondent is subject to the provi-sions
of Chapter 93 of the North Caro-lina
General Statutes ( NCGS) and
Title 21, Chapter 8 of the North Carolina
Administrative Code ( NCAC), includ-ing
the Rules of Professional Ethics and
Conduct promulgated and adopted
therein by the Board.
2. Respondent’s actions as set out above
constitute violations of NCGS 93- 12( 9) e
and 21 NCAC 8N .0203( b)( 3).
BASED ON THE FOREGOING and in
lieu of further proceedings under
21 NCAC Chapter 8C, the Board and
Respondent agree to the following Or-der:
1. The effective term of the suspension
of Respondent’s CPA certificate is ex-tended
by at least one ( 1) year and until
Respondent provides the Board with
verification of his completion of eight ( 8)
hours of CPE in accounting and audit-ing.
2
Disciplinary Actions
Melvin Brent James
Raleigh, NC 06/ 24/ 02
THIS CAUSE, coming before the Board
at its offices at 1101 Oberlin Road, Ra-leigh,
Wake County, North Carolina,
with a quorum present. Pursuant to
NCGS 150B- 41 and 150B- 22, the Board
and Respondent stipulate the follow-ing
Findings:
1. Respondent was the holder of North
Carolina certificate number 11002 as a
Certified Public Accountant.
2. On March 16, 2001, the North Caro-lina
State Board of CPA Examiners
( Board) approved a Consent Order ( Or-der)
signed by Respondent which sus-pended
Respondent’s certificate for at
least one ( 1) year and obligated Respon-dent
to complete several other require-ments.
3. Respondent failed to timely comply
with several of the requirements as
mandated by the March 16, 2001, Order.
4. In October of 2001, Respondent deliv-ered
to the Board evidence of his efforts
to comply with the requirements as
mandated by the March 16, 2001, Order
with the exception of his failure to com-plete
eight ( 8) hours of continuing pro-fessional
education ( CPE) in account-ing
and auditing.
5. At its October 2001 meeting, the Board
approved the issuance of a Letter of
Warning to Respondent regarding his
failure to timely comply with the re-quirements
of the March 16, 2001, Or-der.
6. In this letter, the Board agreed to
extend until December 31, 2001, the re-quirement
that Respondent complete
eight ( 8) hours of CPE in accounting and
auditing.
7. As of the date of this Order, Respon-dent
has failed to provide the Board
with verification of his completion of
eight ( 8) hours of CPE in accounting and
auditing.
8. Respondent wishes to resolve this
matter by consent and agrees that the
Board staff and counsel may discuss
this Order with the Board ex parte,
Theodore Ezzell Peterson, Jr.
Charlotte, NC 06/ 24/ 02
THIS CAUSE, coming before the Board
at its offices at 1101 Oberlin Road, Ra-leigh,
Wake County, North Carolina,
with a quorum present. Pursuant to
NCGS 150B- 41 and 150B- 22, the Board
and Respondent stipulate the follow-ing
Findings:
1. Respondent was the holder of North
Carolina certificate number 3979 as a
Certified Public Accountant.
2. On August 21, 2000, the North Caro-lina
State Board of CPA Examiners
( Board) approved a Consent Order
signed by Respondent that required
Respondent to obtain and complete peer
reviews which should have been ob-tained
and completed for 1994 and 1997
compliance with the Board’s State Qual-ity
Review requirements. This Order also
required that Respondent obtain pre-issuance
reviews of all audits, reviews,
and compilations which Respondent
worked on or performed until such time
as Respondent’s employer received an
unqualified opinion on a peer review
that included audits, reviews, and com-pilations
worked on or performed by
Respondent and until Respondent com-pleted
the 1994 and 1997 peer reviews.
3. It now appears that Respondent
would be unable to complete his 1994
AICPA peer review due to his inability
to complete AICPA’s requirements for
its acceptance of the peer review.
4. Further, it appears that it would be
difficult, if not impossible, for Respon-dent
to obtain and complete a peer re-view
of information that should have
been reviewed in a timely 1997 peer
review.
5. In September of 2001, Respondent’s
employer received an unqualified opin-ion
on a peer review that included a
compilation and a review that Respon-dent
prepared. However, the peer re-view
did not include any audits which
Respondent worked on or prepared.
6. Respondent’s employer is continu-ing
to obtain pre- issuance reviews of
audits worked on or prepared by Re-spondent.
7. Respondent wishes to resolve this
matter by consent and agrees that the
Board staff and counsel may discuss
this Order with the Board ex parte,
whether or not the Board accepts this
Order as written.
BASED UPON THE FOREGOING, the
Board makes the following Conclusions
of Law:
1. Respondent is subject to the provi-sions
of Chapter 93 of the North Caro-lina
General Statutes ( NCGS) and
Title 21, Chapter 8 of the North Carolina
Administrative Code ( NCAC), includ-ing
the Rules of Professional Ethics and
Conduct promulgated and adopted
therein by the Board.
2. Respondent’s actions along with the
other facts and conditions as set out
RE: 21 NCAC 8N .0402
BACKGROUND INFORMATION
Petitioner is licensed in North Caro-lina
and Petitioner’s firm is registered
to do business in North Carolina as a
limited liability partnership.
Petitioner’s firm is offering a service
for third- party administration of de-fined
contribution retirement plans
only. The third- party administration
services provided would be as follows:
1. Preparation of summary statements
of participant financial information;
2. Preparation of participant account
statements;
3. Preparation of IRS Form 5500;
4. Performance of nondiscrimination
tests as required for the plan;
5. Computation of forfeiture and dis-tribution
amounts;
6. Determination of vesting percent-ages
for employees;
7. Calculation and allocation of em-ployer
contributions; and
Declaratory Ruling
Declaratory Rulings set no precedents and are limited to the facts of the request and may be relied upon only by the requesting party.
3
above indicate that Respondent has
made some reasonable efforts to comply
with the prior Consent Order, but that
unless that Order is supplemented, the
objectives of that Order might be
unachievable under the circumstances.
BASED ON THE FOREGOING and in
lieu of further proceedings under
21 NCAC Chapter 8C, the Board and
Respondent agree to the following Or-der:
1. Respondent is hereby released from
the August 21, 2000, Consent Order re-quirement
that he obtain and complete
the 1994 and 1997 peer reviews.
2. Respondent must continue to obtain
pre- issuance review of any audit that he
works on or performs until he or his
employer receives an unqualified peer
review report that includes audits that
Respondent worked on or performed.
8. Allocation of gains and losses to
individual participant accounts.
QUESTIONS
1. Can Petitioner’s firm perform an au-dit
for a client for which the firm is
providing third- party administration
services?
2. Can Petitioner’s firm perform an au-dit
or review for a client who is the
sponsor of a separate retirement plan
for which the firm is providing third-party
administration services?
CONCLUSION
No, to both questions. Petitioner’s firm
would not be independent in either in-stance
pursuant to the AICPA Code of
Professional Conduct, Section 101- 3 and
to the Board’s ethics rule, 21 NCAC 8N
.0402( c)( 1) because Petitioner’s firm
would be preparing source or original
documents of the following nature:
1. Statements of participant financial
information;
2. IRS Form 5500;
3. Computation of forfeiture and dis-tribution
amounts;
4. Determination of vesting percent-ages;
and
5. Calculation of employer contribu-tions.
Petitioner would also not be indepen-dent
in providing an audit or review to
a client who sponsors a defined ben-efit
retirement plan for which
Petitioner’s firm also performs audits
that plan and provide third- party ad-ministration
services.
Date of Request: 04/ 29/ 02
Date of Board Approval: 06/ 24/ 02
If you have questions regarding this
Declaratory Ruling, please contact
Robert N. Brooks, Executive Director
of the NC State Board of CPA Examin-ers,
by telephone at ( 919) 733- 4222 or
via e- mail ( rnbrooks@ bellsouth. net).
During the final stages of production of
GASB Statement No. 39, an error oc-curred
and the phrase “ or its compo-nent
units” was inadvertently dropped
from paragraph 5 of the Standard.
The missing phrase is in criterion
40a( 2) and is shown below in boldface
type.
5. Paragraph 40a is added between
paragraphs 40 and 41 as follows:
40a. Certain organizations warrant in-clusion
as part of the financial reporting
entity because of the nature and significance
of their relationship with the primary gov-ernment,
including their ongoing financial
support of the primary government or its
other component units. A legally separate,
tax- exempt organization should be reported
as a component unit of a reporting entity if
all of the following criteria are met:
1. The economic resources received or
held by the separate organization are en-tirely
or almost entirely for the direct benefit
of the primary government, its component
units, or its constituents.
2. The primary government, or its
component units, is entitled to, or has the
ability to otherwise access, a a majority of the
economic resources received or held by the
separate organization.
3. The economic resources received or
held by an individual organization that the
specific primary government, or its compo-nent
units, is entitled to, or has the ability to
otherwise access, are significant to that pri-mary
government.
a [ The footnote is correct as printed.]
To obtain a “ peel- and- stick” cor-rection
overlay, please call GASB at
1- 800- 748- 0659 or send an e- mail to
( gasbpubs@ gasb. org).
Error Correction for GASB Statement No. 39
www. state. nc. us/ cpabd
4
Independent PAB Board - To en-sure
independence from the accounting
profession, a PAB would be dominated
by persons not associated with the ac-counting
profession.
This requirement likely would be
met by a board with nine members - no
fewer than six of whom are indepen-dent
public members, and no more than
three of whom are practicing or retired
members of the public accounting pro-fession.
The latter members would provide
needed current expertise, but possible
accounting profession members would
expressly not have any vote in, or say
about, a PAB’s determinations regard-ing
disciplinary actions or findings
about, and sanctions to be imposed on,
members.
Independent PAB Funding - A PAB
will have a dependable, uninterrupted,
non- discretionary funding source, from
both its accounting firm members and
public company adjunct members, to
ensure that its funding is not based on
discretionary payments or on funding
exclusively by the accounting profes-sion.
Strong Oversight by PAB - Ac-counting
firms, individual accountants,
public companies and their manage-ment
would be required and obligated
to cooperate with PAB quality control
reviews and disciplinary proceedings,
and a PAB would determine appropri-ate
document retention guidelines for
its member firms.
Failure to cooperate could result in
suspension of the right to conduct pub-lic
audits. A PAB’s efforts would be
directed at enforcing ethical and com-petency
standards respecting account-ing
firms and individual accountants.
A PAB would not conduct any roving
investigations of public companies.
PAB Quality Control Reviews - A
PAB will directly perform quality con-trol
reviews of audit procedures and
practices, at least annually for large firms
( those that audit approximately 80% of
SEC- registered US public companies)
and at least triennially for all other firms.
Such reviews will be designed to
ensure that audit firms have quality
control policies and procedures regard-ing,
among other things: ( i) indepen-dence,
integrity and objectivity of au-dits;
( ii) personnel management; ( iii)
acceptance and continuation of audit
clients; ( iv) audit performance; ( v) audit
methodology; and ( vi) consultation and
resolution of differences of professional
opinion during audits.
In addition to the above items, qual-ity
control reviews would address,
among other things: ( i) rotation of audit
personnel; ( ii) independent partner re-views
of audits; ( iii) consulting services;
( iv) reporting termination of auditor
engagements to the SEC; ( v) assisting in
audits by foreign associated firms; ( vi)
reporting litigation alleging violations
of the securities laws; and ( vii) partners
and employees of auditors joining cli-ents.
PAB Disciplinary Powers - A PAB
will be responsible for conducting pub-lic
disciplinary proceedings and im-posing
a broad range of disciplinary
sanctions against its accounting firm
and individual accountant members,
including fines, censures, removal from
client engagements, limitations on ac-tivities
and suspension from auditing
either specific SEC clients, or all SEC
clients for a time certain, or an unlimited
time.
A PAB may discipline individual
accountants for unethical or incompe-tent
conduct or other violations of pro-fessional
standards. A PAB may disci-pline
accounting firms for not having
quality control systems that meet the
highest professional standards or for
not complying with such systems in a
way that provides reasonable assur-ance
that the firm meets or exceeds pro-fessional
standards in its audit, review
or attest engagements.
Audit Standard Setting - A PAB
will have the responsibility for assur-ing
high ethics, auditing, and quality
control standards, either by setting them
directly or by relying on and overseeing
designated private sector bodies as au-thoritative
sources of such standards.
( A PAB will not, however, establish
GAAP, which would continue to be
established by the FASB, subject to revi-talized
and revamped SEC oversight).
For more information about the pro-posal,
visit the SEC web site
( www. sec. gov).
NCDOR Issues Three
Directives
The Corporate Income, Excise, and In-surance
Tax Division of the NC Depart-ment
of Revenue ( NCDOR) recently is-sued
three directives on corporate in-come
and franchise tax.
Directive CD- 02- 1, Nexus and Filing
Obligations of Corporate Members of Lim-ited
Liability Companies ( LLCs), clarifies
the NCDOR’s position concerning
nexus and filing obligations of corpo-rate
members of limited liability compa-nies
( LLCs).
Directive CD- 02- 2, Corporate Mem-bers
of Limited Liability Companies , ex-plains
the North Carolina franchise tax
liability of a corporate member of a lim-ited
liability company ( LLC) under
NCGS 105- 114, as amended by Chapter
327 of the 2001 Session Laws.
Directive CD 02- 3, Internal Revenue
Code § 338( h)( 10), announces a change
in the NCDOR’s administrative prac-tice
as it relates to North Carolina’s
recognition and treatment of the gains
or losses that result from a taxpayer’s
election to treat a stock sale as a deemed
sale of assets under Internal Revenue
Code § 338( h)( 10). The change is effec-tive
for acquisition dates occurring on
or after June 1, 2002.
The full text of the directives is avail-able
from the NCDOR web site
( www. dor. state. nc. us). Additional in-formation
about the directives can be
obtained by calling the Corporate, Ex-cise,
and Insurance Tax Division of the
NCDOR at ( 919) 733- 8510.
Grade reports for the May 2002
Uniform CPA Examination will be
mailed to candidates August 5, 2002.
A candidate whose address has
changed since sitting for the exam
should submit a change of address
form to the Board as soon as possible.
Address changes must be in writ-ing
and may be faxed to the Exam
section at ( 919) 733- 4209.
Address changes may also be e-mailed
to jmacombe@ bellsouth. net
or pwelliot@ bellsouth. net.
Exam Grades
Public Accountability Board
continued from front page
5
The Financial Accounting Standards
Board ( FASB) has approved for issu-ance
an Exposure Draft of a proposed
Interpretation that establishes account-ing
guidance for consolidation of spe-cial-
purpose entities ( SPEs).
The proposed Interpretation, Con-solidation
of Certain Special- Purpose Enti-ties,
will apply to any business enter-prise—
both public and private compa-nies—
that has an ownership interest,
contractual relationship or other busi-ness
relationship with an SPE.
The proposed guidance would not
apply to not- for- profit organizations.
The comment period concludes August
30, 2002.
The objective of this proposed Inter-pretation
is to improve financial report-ing
by enterprises involved with SPEs—
not to restrict the use of SPEs.
However, it is expected that when
this proposal is implemented, more SPEs
will be consolidated than in the past.
Most SPEs serve valid business pur-poses,
for example, by isolating assets or
activities to protect the interests of credi-tors
or other investors, or to allocate
risks among participants.
Many SPEs that were unconsoli-dated
prior to the issuance of this pro-posed
Interpretation were reported ac-cording
to the guidance and accepted
practice that existed prior to this pro-posed
Interpretation.
Current accounting standards re-quire
an enterprise to include subsidiar-ies
in which it has a controlling finan-cial
interest in its consolidated financial
statements.
That requirement usually has been
applied to subsidiaries in which an
enterprise has a majority voting interest
but, in many circumstances, the
enterprise’s consolidated financial
statements do not include SPEs with
which it has fundamentally similar re-lationships.
The reason is that existing consoli-dation
guidance focuses primarily on
Reclassification - Retired
Retired
“ Retired,” when used to refer to the status of a person, describes one possessing
a North Carolina certificate of qualification who verifies to the Board that the
applicant does not receive or intend to receive in the future any earned
compensation for current personal services in any job whatsoever and will not
return to active status [ 21 NCAC 8A .0301( b)( 23)]
06/ 24/ 02 Augustus Thomas Allen, Jr. Raleigh, NC
06/ 24/ 02 Grady S. Duncan Belmont, NC
06/ 24/ 02 Charles S. Myerly Columbia, SC
06/ 24/ 02 Jane Parenteau Kernersville, NC
06/ 24/ 02 Lawrence P. Roesen Newport News, VA
06/ 24/ 02 Robert C. Wade Arden, NC
06/ 24/ 02 Kenneth Frederick Winton Kenansville, NC
FASB Proposes Consolidation Principles for SPEs
parent- subsidiary relationships estab-lished
through voting ownership inter-ests,
and the relationship between a
business enterprise and an SPE is estab-lished
through other means.
FASB believes that if a business
enterprise has a controlling financial
interest in an SPE, the assets, liabilities
and results of the activities of the SPE
should be included in consolidated fi-nancial
statements with those of the
business enterprise, which is referred to
as the primary beneficiary of the SPE.
As to finalization of this project, the
FASB expects to issue an Interpretation
in the fourth quarter of this year.
The accounting guidance would be
effective immediately upon issuance of
the Interpretation for new SPEs.
Companies with SPEs that existed
prior to issuance of the Interpretation
would be required to apply the guid-ance
to the existing SPEs at the begin-ning
of the first fiscal period after
March 15, 2003.
Calendar year- end companies
would need to apply the guidance on
April 1, 2003.
The Exposure Draft may be accessed
from the FASB’s web site at
( www. fasb. org) or by calling the FASB
Order Department at 1- 800- 748- 0659.
Board Meetings
Friday, August 16
Monday, September 23
Friday, October 18
Monday, November 18
Tuesday, December 17
Meetings of the Board are held at the
Board office and are open to the pub-lic.
However, under State law, some
portions of the meetings are closed to
the public.
If you wish to address the Board
regarding a specific issue, please con-tact
Robert N. Brooks, Executive Di-rector
of the Board, by telephone at
( 919) 733- 4222 at least two weeks
prior to the scheduled Board meet-ing.
Certificates Issued
At its June 24, 2002, meeting, the Board
approved the following applications
for certification:
Bryan G. Goetsch
Samuel Snowden Hayes
Robert Edward Stoettner
If you have comments about items pub-lished
in the Activity Review, please
contact Lisa R. Hearne, Communica-tions
Manager, by telephone at ( 919)
733- 4208 or by e- mail at
( lhearne@ bellsouth. net).
Comments
6
Reclassification - Inactive Status
Inactive
“ Inactive,” when used to refer to the status of a person, describes one who has requested inactive status and been approved
by the Board and who does not use the title “ certified public accountant” nor does he or she allow anyone to refer to him or
her as a “ certified public accountant” and neither he or she nor anyone else refers to him or her in any representation as
described in 21 NCAC 8A .0308( b) [ 21 NCAC 8A .0301( b)( 23)].
06/ 19/ 02
Murray Hearin Schmitt Rocky Mount, NC
Thresa Kay Pressley Raleigh, NC
John Robert Prekker Danville, NC
06/ 21/ 02
George Edward King, Jr. Cary, NC
Danielle Stephenson Lowden Raleigh, NC
Christopher Hubert Steinhardt Charlotte, NC
William H. Hockman Washington, PA
Susan Fulcher Nelson Collinsville, VA
06/ 24/ 02
Melvin A. Bost Concord, NC
Lana D. Imhof Waxhaw, NC
06/ 25/ 02
John Lewis Johnson Burlington, NC
Clarence Gordon Stillwell, Jr. Greensboro, NC
David Alan Pruett Roanoke, VA
Millicent Hawkins Williams Apex, NC
Harold Lee Flowers Ft. Lauderdale, FL
Steven Craig Highland Waynesboro, VA
Kristine Suong Dinh Augusta, GA
Cheryl Hilliard Habrat Charlotte, NC
Lynn Karen Hiller West Des Moines, IA
Daniel R. Lucas Plantation, FL
John Joseph Riedel, Jr. South Lake Tahoe, CA
Kelli Ann Koonsman Charlotte, NC
06/ 26/ 02
David Scott Hood Charlotte, NC
06/ 27/ 02
Joseph Asa Whitt Richmond, VA
James Hampden Howard, Jr. Gastonia, NC
James Howard Hatch Charlotte, NC
Lindon G. Robertson Bethel, CT
James Phillip Wilson Raleigh, NC
Holly Morgan Burdette Concord, NC
06/ 28/ 02
Thomas Hooper Averitt Aberdeen, NC
Robert Gerard Matkovich Gordonsville, VA
James Dean Whittaker Cary, NC
Rudell Richardson Macon, GA
Stephen Emile Tremblay Baltimore, MD
Cynthia Ann Best Durham, NC
Jason Bradley Whitlatch Greensboro, NC
Nancy Louise Davis Orlando, FL
06/ 11/ 02
Alfred Clyde Starling Charlotte, NC
James Barron Cartwright, Jr. Cemmons, NC
John Charles Wright Potomac, MD
William McGillvary Orr, III Ellicott City, MD
William Michael Kay Hickory, NC
Donald Roland Suttles Winston- Salem, NC
John Markelonis Germantown, MD
David James Bowman Kernersville, NC
Walter Greene Church, Jr. Valdese, NC
Sue Patterson Bielawski Chapel Hill, NC
Leah J. McKern San Francisco, CA
Sherri Snowden Voelkel Riva, MD
Henrietta Stewart Wheeler High Point, NC
Joy Elizabeth Dickerson Greenville, SC
Todd Ryan Rosenthal Charlotte, NC
Karen Lynn Miller Clearwater, FL
Angela Criminger Ellis Charlotte, NC
Elizabeth Ballentine Gierhart Hope Mills, NC
Elizabeth Ann Weeber Raleigh, NC
Billie Goodman Ausdenmoore Huntersville, NC
James A. Rippin Greensboro, NC
Gerald Earl Bartram Yucaipa, CA
06/ 12/ 02
Lisa Powell- Temple Holly Springs, NC
06/ 14/ 02
Ralph Edward Forrest Cary, NC
Dennis Niel Folken Sapphire, NC
Melissa Gardner Cowherd Southern Pines, NC
J. Eric Teeter Salisbury, NC
Laura Wilson Freeman Huntersville, NC
Ashley Champion Jones Gastonia, NC
Michael Heath Walters Charlotte, NC
Marty Leigh Clyburn Wilmington, NC
06/ 17/ 02
Sheldon Michael Fox Memphis, TN
Deborah Ritchie Fox Memphis, TN
Christopher Scott Wright Hartford, CT
Mattie Ashburn Simmons Tarboro, NC
Pamela Morgan Watson Atlanta, GA
Linda Susan Lompa Oconomowoc, WI
06/ 18/ 02
Teresa Bullard East High Point, NC
06/ 19/ 02
Robert Frank Key Greensboro, NC
Renee C. Allain- Stockton Switzerland
77
Main Telephone Number ( 919) 733- 4222
Fax Number ( 919) 733- 4209
Toll- Free Application Line 1- 800- 211- 7930 ( for requesting exam & licensing applications)
Mailing Address PO Box 12827 Raleigh, NC 27605- 2827
Physical Address 1101 Oberlin Road, Suite 104 Raleigh, NC 27605- 1169
Web Site http:// www. state. nc. us/ cpabd
Office Hours Mon. - Fri., 8 a. m. - 5 p. m. ( closed on State holidays)
Please use the following directory to correctly identify the person to contact to receive prompt service from the Board.
If the person you need to speak with is unavailable, you may leave a message on his or her voice mail or you may
press “ 0” to reach the receptionist.
Administrative Services ( accounting, purchasing, mailing labels & lists)
Felecia F. Ashe ( 919) 733- 4223 feleciaa@ bellsouth. net
Communications ( newsletter, web site, press releases)
Lisa R. Hearne, Manager ( 919) 733- 4208 lhearne@ bellsouth. net
Examinations ( exam applications, general exam information)
Judith E. Macomber, Manager ( 919) 733- 4224 jmacombe@ bellsouth. net
Phyllis W. Elliott ( 919) 733- 4224 pwelliot@ bellsouth. net
Executive Director ( Board meetings, public hearings, rule- making requests)
Robert N. Brooks ( 919) 733- 1425 rnbrooks@ bellsouth. net
Licensing ( general licensing information)
Buck Winslow, Manager ( 919) 733- 1421 buckwins@ bellsouth. net
Licensing ( CPA certificate applications & renewals)
Alice G. Steckenrider ( 919) 733- 1422 alicegst@ bellsouth. net
Licensing ( CPE, SQR, firm registrations & renewals)
Lynn Wyatt ( 919) 733- 1423 lynnwyat@ bellsouth. net
Professional Standards ( ethics complaints, declaratory rulings, disciplinary hearings)
Ann J. Hinkle, Manager ( 919) 733- 1426 ahhinkle@ bellsouth. net
Jo Gaskill ( 919) 715- 2455 jogaskil@ bellsouth. net
Receptionist
Karen Burton ( 919) 733- 4222 karenburton@ bellsouth. net
.
North Carolina State Board of CPA Examiners
Directory of Board Services
Please save this page for future reference.
Certificate No. Send Mail to Home Business
New Home Address
City State Zip
CPA Firm/ Business Name
New Bus. Address
City State Zip
Telephone: Bus. ( ) Home ( )
Bus. fax ( ) E- mail Address
Certificate Holder
Last name Jr./ III First Middle
North Carolina State Board of
Certified Public Accountant Examiners
Post Office Box 12827
Raleigh NC 27605- 2827
PRST STD
US Postage
PAID
Greensboro, NC
Permit No. 393
21,000 copies of this document were printed for this agency at a cost of $ 2,758.29 or 13¢ per copy in July 2002.
Certificate holders not notifying the Board in writing within 30 days of any change in address or business location may be subject to
disciplinary action under 21 NCAC 8J .0107.
Address Change? Let Us Know!
Signature Date
Mail to: NC State Board of Fax to: ( 919) 733- 4209
CPA Examiners
PO Box 12827
Raleigh, NC 27605- 2827
State Board of
CPA Examiners
Board Members
R. Stanley Vaughan, CPA
President, Charlotte
O. Charlie Chewning, Jr., CPA
Vice President, Raleigh
Michael H. Wray
Secretary- Treasurer, Gaston
Barton W. Baldwin, CPA
Member, Mount Olive
Scott L. Cox, CPCU, CIC
Member, Charlotte
Walter C. Davenport, CPA
Member, Raleigh
Leonard W. Jones, CPA
Member, Morehead City
Staff
Executive Director
Robert N. Brooks
Legal Counsel
Noel L. Allen, Esq.
Administrative Services
Felecia F. Ashe
Communications
Lisa R. Hearne, Manager
Examinations
Judith E. Macomber, Manager
Phyllis W. Elliott
Licensing
Buck Winslow, Manager
Alice G. Steckenrider
Lynn Wyatt
Professional Standards
Ann J. Hinkle, Manager
Jo Gaskill
Receptionist
Karen Burton